Sina, Tencent Square Off For Market Share In China

China, a vast land with a huge, young tech-friendly population constantly on the move, seems tailor-made for all things mobile. And what segments could gain more from mobile than e-commerce and social networking?

That's the conclusion drawn by a good number of entrants vying for a share of the attention of a billion eyeballs. Remember, this is largely an ad revenue-generated business. China's Internet population is nearing 600 million, and the shift is on to mobile.

It's tough to find reliable market-share data, but Sina Weibo's grab of the blogging arena is said to be at least 55%. Privately held e-commerce giant Alibaba said in April it will pay $586 million for an 18% stake in Sina, with an option to up its ownership to 30%.

Sina gets a new window into China's e-commerce market, while Alibaba buys entry into social networking.

And both sides of this new partnership are better poised to compete against Hong Kong-listed Tencent Holdings, a behemoth in China's Internet arena. Tencent is the country's biggest e-commerce provider. It also provides popular platforms for instant messaging and chatting. And gaming makes up half the company's sales.

Tencent's Q2 report, seen Wednesday, showed an 18% EPS gain. Sales rose 37%, with big help from e-commerce and gaming.

Tencent's earnings missed consensus, as the company upped its marketing investment in WeChat, which goes head-to-head with Sina's Weibo. "If you don't spend within a year, you're not going to be able to capture market share in the future, so that's why we're spending," said Tencent President Martin Lau.

Sina guided Q3 revenue to between $176 million and $180 million, higher than the $165.5 million consensus.

Sina and Tencent are far from any buy points, and should be put on your back-burner list. Nasdaq-listed Sina has soared 33% from its 61.85 entry in less than a month.

Tencent, which has yet to react to its Q2 report, is 17% above its HKD 316 entry from a flat base.

China, a vast land with a huge, young tech-friendly population constantly on the move, seems tailor-made for all things mobile. And what segments could gain more from mobile than e-commerce and social networking?

That's the conclusion drawn by a good number of entrants vying for a share of the attention of a billion eyeballs. Remember, this is largely an ad revenue-generated business. China's Internet population is nearing 600 million, and the shift is on to mobile.

It's tough to find reliable market-share data, but Sina Weibo's grab of the blogging arena is said to be at least 55%. Privately held e-commerce giant Alibaba said in April it will pay $586 million for an 18% stake in Sina, with an option to up its ownership to 30%.

Sina gets a new window into China's e-commerce market, while Alibaba buys entry into social networking.

And both sides of this new partnership are better poised to compete against Hong Kong-listed Tencent Holdings, a behemoth in China's Internet arena. Tencent is the country's biggest e-commerce provider. It also provides popular platforms for instant messaging and chatting. And gaming makes up half the company's sales.

Tencent's Q2 report, seen Wednesday, showed an 18% EPS gain. Sales rose 37%, with big help from e-commerce and gaming.

Tencent's earnings missed consensus, as the company upped its marketing investment in WeChat, which goes head-to-head with Sina's Weibo. "If you don't spend within a year, you're not going to be able to capture market share in the future, so that's why we're spending," said Tencent President Martin Lau.

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